BILL ANALYSIS



S.B. 641
By: Montford (Holzheauser)
May 8, 1995
Committee Report (Unamended)


BACKGROUND

During the 73rd Legislative Session, H.B. 1461 was enacted which
transferred certain tax administration functions from the
Department of Insurance to the Comptroller's office.  In evaluating
these functions, the Comptroller recommends adjusting certain
provisions.

PURPOSE

This bill proposes to make several changes relating to the
administration of insurance premium taxes and the collection of
certain insurance fees.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION BY SECTION ANALYSIS

SECTION 1.  Reenacts and amends Section 12 (Independently Procured
Insurance Tax), Article 1.14-1, Insurance Code, as follows:

     (a)  Requires every insured who procures insurance in
     accordance with Section 2(b)4 of this Article to file a report
     with the comptroller and pay an independently procured
     insurance tax of 4.85 percent.  Deletes additional
     requirements.
     
     (b)  Requires the report to be filed and any tax due to be
     paid by the insured or by any other person designated by the
     insured.  Provides that the report and tax are due on or
     before a certain date.  Deletes provisions regarding a premium
     receipts tax.  
     
     (c)  Requires the tax payable to be computed on the portions
     of the premium which are properly allocated to the risks or
     exposures located in this state if a policy covers risks or
     exposures only partially.  Deletes provisions regarding
     premiums that are taxable.
     
     (d)  Makes a conforming reference to Subsection (b).
     
     (e)  Redesignates existing Subsection (g).
      SECTION 2.    Amends Section 12(a), Article 1.14-2, Insurance
Code, by changing the date surplus lines agents must report the
amount of gross premiums received to March 1st; and exempts from
taxation premiums properly allocated to other states.

SECTION 3. Amends Section 5 (Gross Premium Receipts Defined),
Article 4.10, Insurance Code, by redefining "gross premium
receipts" as the total gross amount of premiums actually written
during the taxable year.

SECTION 4. Amends Article 8.21, Insurance Code, to specify that the
Texas Department of Insurance, rather than the State Board of
Insurance, charges a fee of $20 for filing the annual statement
required by this chapter.  Requires the comptroller to collect the
fee. 

SECTION 5.  Amends Article 16.22 (Fees), Insurance Code, to reflect
the name change from the State Board of Insurance to the Texas
Department of Insurance; and to clarify that the Department is
responsible for collecting the fees for filing or amending a
certificate of authority.  Specifies that the comptroller shall
collect the annual filing fee.

SECTION 6.  Amends Article 17.21 (Fees), Insurance Code, to reflect
the name change from the State Board of Insurance to the Texas
Department of Insurance; and to clarify that the Department is
responsible for collecting the fees for filing or amending a
certificate of authority.  Specifies that the comptroller shall
collect the annual filing fee.

SECTION 7.  Amends Article 19.11, Insurance Code, to require said
exchanges to be subject to the provisions of certain Articles of
this Code.  Requires the comptroller to collect the taxes and the
annual statement filing fee.

SECTION 8.  Amends Subsection (a), Section 32, Texas Health
Maintenance Organization Act, (Article 20A.32, Vernon's Texas
Insurance Code) by adding Subdivision (4), to require the
comptroller to collect the annual report filing fee prescribed by
Subdivision (1)(B) of this subsection.

SECTION 9.  Amends Subsection A, Article 21.46, Insurance Code, to
require the comptroller to prescribe the due date for the filing of
the report and payment of the tax under this article.  

SECTION 10.    Amends Article 23.08, Insurance Code, to require the
comptroller to collect an annual statement filing fee.  Deletes
requirement that fees shall be deposited in the state treasury to
the credit of the department operating the fund.

SECTION 11.    Effective date:  September 1, 1995.  
           Makes application of this Act prospective.

SECTION 12.    Emergency clause.

SUMMARY OF COMMITTEE ACTION

On April 27, 1995, the committee met in a formal meeting and
considered S.B. 641.  By a record vote of 8 ayes, 0 nays, 0 present
not voting and 3 absent, the committee voted to report S.B. 641 to
the House without amendment with the recommendation that it do
pass.